Commissioner of Internal Revenue, Petitioner, v. Alex Rubinstein, Respondent, 264 F.2d 478 (3d Cir. 1959)

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US Court of Appeals for the Third Circuit - 264 F.2d 478 (3d Cir. 1959) Argued March 5, 1959
Decided March 17, 1959

George W. Beatty, Washington, D. C. (Charles K. Rice, Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Melvin L. Lebow, Attys., Dept. of Justice, Washington, D. C., on the brief), for petitioner.

Herbert L. Zuckerman, Newark, N. J., for respondent.

Before GOODRICH, KALODNER, and HASTIE, Circuit Judges.


This is an appeal by the Commissioner of Internal Revenue from a decision of the Tax Court in favor of the taxpayer. In order to sustain the claim for unpaid taxes for the years in question (1942 and 1944) fraud had to be shown because the statute of limitations would have precluded opening up the question for those years. Int.Rev.Code of 1939, §§ 275, 276, 26 U.S.C.A. §§ 275, 276.

The original returns had been destroyed in accordance with the provision of the statute. 44 U.S.C.A. §§ 366-374 (Supp.1958); H.R. Rep. No. 649, 81st Cong., 1st sess. (1949). Therefore, the Commissioner had to proceed on secondary evidence to establish their contents and this he tried to do. In addition, fraud had to be proved by clear and convincing evidence. Valetti v. Commissioner, 3 Cir., 1958, 260 F.2d 185, 188. The Tax Court, with three judges dissenting, concluded that the Commissioner had not "carried his burden of proving that a fraudulent return was filed so as to avoid the statute of limitations * * *." Alex Rubinstein, Feb. 17, 1958, 29 T.C. No. 93. The case, therefore, involves simply the weighing of the evidence used to reach a conclusion. The conclusion that the evidence was not strong enough to establish fraud is perhaps not the only possible conclusion that could have been drawn from what was before the court. But the conclusion is sustained by enough evidence so that we cannot say, which we must to reverse, that the fact finding was clearly erroneous. Int.Rev.Code of 1939, § 1141 (a) as amended ch. 646, § 36, 62 Stat. 991 (1948) 26 U.S.C.A. § 1141(a).

The judgment of the Tax Court will be affirmed.